Apache backs out

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It’s hard to know the real reason why Apache has decided not to proceed with its shale gas joint venture with Corridor. You would need a phd in geology to understand the language in the press release. Corridor doesn’t want to downplay the potential of shale gas (and hurt its share price further) so they aren’t prepared to us fatalistic language and remain upbeat about the potential.

The truth is that shale gas is everywhere. If you look at the US EIA assessment, there are substantial deposits throughout the U.S. and western Canada in addition to the Maritimes and Quebec.

It is also true that the price of natural gas these days is very low and expected to remain low. As a result, investment in shale gas is going to flow to areas where there is perceived to be the most cost effective extraction. The areas where it is less cost effective will be developed in subsequent phases.

It will be interested to see how this plays out. I hope we can get this industry off the ground and turn it into an economic engine for the province but the competition for investment is significant.